The role of culture has been prioritised by regulators and leaders of financial services organisations in recent years, as a positive culture helps to attract and retain good talent, and decreases the risk of internal misconduct and regulatory controversy.
Culture is a top priority
Over the last decade, culture in companies within the global financial markets has been consistently high on the priorities list of the regulators across several international markets. Culture is acknowledged as a fundamental cause of considerable conduct failings that have occurred within the industry in the years leading up to the crash. Organisations are now moving to overhaul and create positive, healthy cultures which underpin the principles of regulation
Firms operating within the financial services sector are striving to create a culture that helps ensure everyone working in the business is completely clear on the requirements relating to their behaviours and the management of market conduct risk. And, employees need to be continuously supported in their efforts to both meet growth targets and the regulatory standards.
In 2019, the outbreak of Covid-19 froze economic activity, leaving hundreds of thousands unemployed and most nations' populations housebound. For those who could, remote working became the norm, and companies needed to adapt quickly. Covid-19 and the new norm of remote working undoubtedly raises new issues and challenges in overseeing culture. And physical separation risks further fracturing this culture.
Good culture reduces the risk of misconduct
Culture constitutes the way things are done and is an outcome of ideas, customs and social behaviours within an organisation. When managed effectively, a clear and positive culture can boost employee commitment, engagement, and drive strong performance. As Daniel Coyle says in The Culture Code: The Secrets of Highly Successful Groups, “Give a good idea to a mediocre team, and they’ll find a way to screw it up. Give a mediocre idea to a good team, and they’ll find a way to make it better. The goal needs to be to get the team right, get them moving in the right direction, and get them to see where they are making mistakes and where they are succeeding.”
As banks and financial institutions continue to digitally transform their organisations, many now deploy online platforms to create a thriving work environment, while also clearly outlining responsibilities, goals and enhancing the right behaviours. This both creates and compounds a positive culture. And, in the case of the financial services industry, ensuring everyone working in the organisation is fully aligned, which helps drive growth. It also simultaneously battles misconduct and strengthens compliance procedures in our journey towards building safer and more transparent global financial markets. The need for technology to help financial institutions and companies with creating and maintaining a healthy culture, is becoming more and more apparent.
Top tips for improving culture within your financial institution
- Drive culture and conduct agenda from the top down.
- Give people online tools for building your company culture.
- Incorporate culture and conduct considerations into hiring process and training programmes.
- Encourage people to report risk events through communication channels.
- Implement mechanisms to monitor culture including surveys, pulse checks, culture and conduct dashboards, focus group discussions/regular 1:1s.
Contact me, firstname.lastname@example.org to see how Frankli can contribute to enhancing your employees' behaviours towards better performance and at the same time increasing controls around required compliance and regulation best practice or book a demo here.